As designed by Mr. Delaney, the bank would be controlled by a board of directors, a minority of which would be appointed by the president, and the rest appointed by the companies that purchase the most bonds. This means that those corporations that repatriate the most under the proposal would effectively control the board of directors and thus the infrastructure bank. That’s like giving infamous bank robber Willie Sutton the keys to the jail cell and asking him to lock up when he’s done.
There are two major problems. Again, we would be rewarding bad behavior by putting the worst offenders in charge. But when some of the biggest users and abusers of off-shore tax havens are companies whose main assets are in the form of intellectual capital, such as Google, Apple, and Facebook, what possible incentive do they have to invest in roads and bridges? The simple answer is none.
All of the “solutions” recently offered that include a “one-time” tax break to contribute to a long-term and basic spending need is political sleight of hand. It gives big corporations a tax break, gives “Democrats” a talking point on infrastructure spending, and makes everyone appear to be worried about the deficit. All the while actually contributing to the deficit in the long-term.
A serious, long-term solution that would permanently keep much-needed revenues and jobs here in the U.S. would be to tax profits when they are made, wherever they are made. Period. It could raise $600 billion over ten years and stop the flow of jobs overseas. And to use a phrase that is very much in vogue in tax and policy circles, that’s a pretty valuable “pay-for.”
Tichon is director of the Financial Accountability and Corporate Transparency (FACT) Coalition.